Baird analyst, Bob Peck, reiterated his Neutral rating on shares of Yahoo! (NASDAQ: YHOO). Investors are focusing on the expected close of the core sale in the next few months, but many are wondering what happens next. The analyst thinks there are several potential steps, including: returning cash; selling Y!J; monetizing IP & other assets; and lastly a tax efficient process for Yahoo's stake in Alibaba. All of these may happen and appear to create a compelling risk / reward, but the analyst thinks there is risk & complexity which weighs on near term upside.

The analyst sees a maximum upside of $54 per share, or ~25%. Downside is $41 per share making it seem to be a compelling risk / reward. However, when adjusted for deal risk and the potential time value of all deals, the analyst thinks the risk / reward is less attractive. He sees the best case scenario taking 2 years for the time to completion making the potential returns decline to 12% and at 3 years, it's a more modest 8%.

No change to the price target of $42.

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